BackCurrently, we are focusing on growth: Ola’s Bhavish Aggarwal
Aggarwal says Ola’s acquisition of TaxiForSure is complementary to its existing business
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On Monday, India’s largest taxi aggregator, Ola, acquired rival and second largest operator TaxiForSure in a cash and stock deal worth $200 million, potentially heralding consolidation in the country’s booming cab services market. ANI Technologies Pvt. Ltd runs the Ola taxi-hailing service. In an interview, chief executive officer Bhavish Aggarwal of Ola said the acquisition is complementary to Ola’s existing business. He also said that Ola and TaxiForSure will continue to operate as separate entities. Edited excerpts:
Why this acquisition?
I think TaxiForSure has built up a very good business. The founders have built up a very good team. And they have built up a business in a way that it is complementary to Ola. Their strategy on supply side is also very complementary to Ola.
They work with operators, we work with taxi owners. They are targeting the consumer segment of the demand side, which is also complementary to us. They are focused on the economy side of the market while we are looking at broader segment of the market.
We have categories of business, sedan and even autorickshaws. TaxiForSure has also interest on the economy segment of cab consumers with Tata Nanos as part of their fleet and 49 as base fare.
This makes a win-win situation. We want to keep both the companies and brands separate.
What is the rationale of keeping them as separate brands?
The acquisition does not mean combining both companies into one. But it means drawing synergies as combined entity.
Where is the synergy coming from?
There will be lot of complementary value. Now I can work with taxi operators and taxi owners. Till date, Ola was only working with taxi owners.
Now TaxiForSure is part of our family, we can also work with the segment of product base and consumer base.
Why acquire when you were growing bigger?
Again, I will come to the complementary part of it. The opportunity to grow through inorganic was big compared to organic expansion. Also, the founders share a common vision to revolutionalize urban mobility.
Is TaxiForSure profitable?
Worldwide, in the Internet industry, the profit happens after few years. Initially, companies go for market share, not for profit. Also, TaxiForSure has built a good business with a presence in 44 cities. And the strategy is very complementary.
What about profitability of Ola?
If we want, we can be profitable today. Currently, we are focusing on growth and gaining market share. We are focusing on customer acquisitions, driver acquisitions and city expansion.
Is the cash-burn high?
There is a reason companies raise money from investors, which is to invest in growth. By definition, they are fast-growing companies.
But you raised much more money than TaxiForSure?
I think it is not about the money. It is about the strategy we chose to execute, the capital also played a big part and also they followed a different strategy from us. They built different strengths and we built different strengths. And we raised one more round compared to them.
Will you continue to play the role of an aggregator?
Yes. We don’t plan to get into car ownership. We want to enable driver entrepreneurs to buy cars and grow their business.
How is the government regulation playing out now?
I’ll answer that in two parts—one is the regulatory and second, the safety aspect. On the safety aspect, the entire industry has done a lot more steps, things like third-party background checks, crime checks, police verifications; one thing we have done is a safety button in the app itself. So we are ensuring that it is a safer ride for the consumer.
On the regulatory aspect, the government has been very supportive on ensuring that this new business model does not go down. Because fundamentally what we do empowers micro entrepreneurship. We can create so many jobs on the ground.
Does that gain any traction with the government?
Yes definitely. The government realizes that.
Would you go for further acquisitions?
No comment.
What comes next after this acquisition?
See, our vision is that people should not own cars. And we are very far from it. And to achieve that we are growing very fast. And we have sufficient investment to achieve that goal.
What is the timeline for profitability?
Right now, we are focused on growth. If we want we can be profitable but we are focusing on growth. We don’t comment on profitability but we do look at it internally. And many of our Ola cities are profitable. But our focus across all cities is growth.
We will continue to expand the market, continue to go deeper in Ola cities and invest in technology.
Does it make any difference that TaxiForSure promoters Raghunandan G. and Apremaya Radhakrishna are not coming on board as part of the acquisition?
I think they have built a wonderful team. We have a shared vision of what we want to build and it percolates down to the employees of Taxi for Sure. And it is their personal decision to move on and follow other passions.
But the team there is great and supercharged about the vision.
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